Under
the condition of market economy, every financial activity of an enterprise is
faced with certain financial risk. How to correctly understand and guard against
these risks has become an important issue in enterprise financial management.
Financial risk exists objectively. Enterprise managers can only take effective
measures to reduce financial risk, but cannot completely eliminate it.
Financial risks of enterprises are also uncertain, which is very harmful to the
development of enterprises. Therefore, it is necessary to study the causes of
financial risks and preventive measures, so as to improve the economic benefits
of enterprises.

Financial
risk refers to the possibility of economic loss caused by deviation between the
financial gain obtained by an enterprise in a certain period and a certain
range and the expected goal in various financial activities due to the internal
and external environment and various unpredictable or uncontrollable factors.
The complexity of the external environment such as national politics, economy,
culture and technology, as well as the internal environment such as people,
finance and material all determines the existence of financial risks under the
condition of market economy. Correct understanding of financial risks,
strengthening the prevention of financial risks and improving the financial
risk mechanism are the internal requirements for enterprises to improve
economic efficiency and maintain steady development.

Financial
activities are the precondition of production and operation activities. They
are the organic unity of activities such as fund raising, investment,
occupation, consumption, recovery and distribution. Risks may occur in various
activities.

Financing
risk refers to the risk that the enterprise fails to obtain the fund use
benefit according to the established target and the enterprise fails to perform
the contract according to the original requirement to meet the expected result
of the fund supplier. Financing risk is the most important link in financial
risk management of the whole enterprise. It is mainly manifested in the
instability of capital use efficiency, unreasonable capital scheduling and
unreasonable capital structure. The unreasonable capital structure plays an
important role in the financing risk of enterprises.

Enterprise
investment can be divided into inward investment and outward investment
according to the investment of capital. The risk of inward investment is mainly
due to the lack of detailed analysis and research on the feasibility of the
investment project. The risks of foreign investment mainly lie in the lack of
understanding of risks and blind investment, which leads to huge losses of
enterprises.

The
risk of capital recovery mainly refers to the risk caused by the uncertain
recovery time and amount of receivables. In the sales process, due to the lack
of understanding of customers' debt paying ability and credit status, as well
as the unreasonable formulation of credit policies and settlement methods of
the enterprise, blind credit sales of accounts receivable have been unable to
be collected for a long time, thus increasing the collection costs and even
becoming bad or bad debts.

The
risk of income distribution refers to the adverse impact of income distribution
on the enterprise's future production and operation activities. On the one
hand, the risk of income distribution comes from the improper grasp of the
form, time and amount of investors' distribution. On the other hand, it is the
risk of income recognition, that is, due to the influence of objective
environmental factors and improper accounting methods, less calculation of
costs and more recognition of current earnings, so as to inflate current
profits and make enterprises pay taxes in advance, leading to the financial
risk caused by a large amount of capital outflow from enterprises in advance.
Or it is to calculate cost cost more, affirm current income less, reduced
profit thereby, affected company reputation. Therefore, enterprises should
carefully choose accounting methods, reasonably confirm current earnings, and
at the same time choose appropriate dividend policy according to their own
situation, which will neither reduce the corporate reputation nor frustrate the
enthusiasm of investors.

Financial
risk exists in all links of financial management, and the causes of different
financial risks are different. The specific performance is as follows:

The
complexity and changeability of the macro environment of financial management
is the external cause of financial risk.

The
environment of financial management mainly includes economic environment,
market environment, humanistic environment and legal environment. The complex
and changeable external environment change may bring the development
opportunity for the enterprise, may also bring the threat. If the financial
management system cannot adapt to the complex and changeable external
environment, it will inevitably bring danger to the enterprise. As is known to
all, the financial risks brought by the subprime mortgage crisis have prompted
the Chinese government to increase macro-control and the capital chain of
enterprises is tight, thus increasing the pressure on enterprises to raise
funds and repay loans and, in an invisible way, increasing the financial risks
of enterprises.

Capital
structure mainly refers to the proportion between the equity capital and the
liability capital of an enterprise. Due to the unreasonable capital structure
and high cost of liabilities, enterprises have a heavy financial burden and
insufficient solvency, thus generating financial risks.

Enterprise
financial managers have insufficient understanding of the objectivity of
financial risks. As long as the enterprise has financial activities, there must
be financial risks. Financial activities involve the whole process of
enterprise activities, including investment, financing, profit distribution,
inventory management, accounts receivable management, etc. Financial personnel
simply believe that as long as the funds are well managed and used, there will
not be risks, and they cannot fundamentally grasp the nature of risks, thus
increasing the possibility of financial risks.

Financial
decision error is an important reason for financial risk. The key to avoid
financial decision-making error is scientific financial decision-making. There
is a widespread with at present, the past experience or according to their own
judgment to make decisions, the feasibility of investment projects is a lack of
system analysis and research, lack of understanding of the risk of investment,
resulting in the investment decision-making errors, make investment project
cannot obtain the expected earnings, bring greater financial risk.

Financial
risk is closely related to the survival and development of enterprises. As long
as there is a market, there is a risk, as long as there is competition, but the
risk is not so terrible, the financial risk of enterprises can be prevented and
resolved through a series of measures.

The
macroscopical environment of financial management is directly related to the
survival and development of enterprises. The complexity and variability of
financial management is one of the important reasons for the financial risk of
enterprises. It exists outside the enterprise, the enterprise can't exert
influence or control, so the enterprises should play their subjective
initiative, analyze the macro environment changing financial management
research, grasp its change law and tendency, and develop a variety of
contingency measures, timely adjust the financial management policy and change
management methods, to improve the quality of the financial management
personnel, perfect each rules and regulations, make the enterprise financial management
system run effectively, thus improve enterprise financial management macro
changes adaptability and strain capacity, reduce because of macro environment
changes and brings to the enterprise financial risk.

Only
with perfect financial management system can enterprises achieve long-term
development. The establishment and improvement of financial early warning
system is the top priority of financial management. Financial early warning
mechanism is a common method to enable enterprises to identify, analyze and
judge the possible risks in advance, issue an alarm and prompt relevant
personnel to prevent risks. The establishment of short-term financial early
warning system and the preparation of cash flow budget can provide enterprises
with early warning signals, enabling operators to take early measures;
Establish a long-term financial early warning system and establish a financial
analysis indicator system, among which the most representative indicators are
profitability, debt paying ability and development potential ability.

Theoretically
speaking, the enterprise has the lowest comprehensive capital cost ratio and
the best capital structure in a certain period, so does the financial risk. A
company's capital structure cannot be optimal if it is conservative or
aggressive. Only by giving full play to the role of financial leverage,
determining an optimal capital structure and matching the financing risk with
the financing cost can an enterprise maximize its value.

The
risk prevention awareness of financial management personnel plays an important
role in controlling the financial risk of the whole enterprise. In the face of
the ever-changing financial management environment, higher requirements are put
forward for the quality of financial personnel: a strong awareness of risk
prevention should be established, and the awareness of risk prevention should
be infiltrated into all links of financial management; I need to master solid
financial accounting professional knowledge and have the ability to collect,
sort out and analyze financial information. It is necessary to be sensitive to
financial risks, have accurate professional judgment ability, timely discover
and estimate potential financial risks, and be able to make judgment and
propose solutions to risks in specific environment. It is necessary to master
financial, securities, investment and other relevant knowledge to play a
consulting role in the decision-making of enterprises. Meanwhile, it is also
necessary to have extensive contact with production, marketing, human resources
and other departments to reasonably allocate the capital of enterprises to the
place where it is most needed, so as to make full and effective use of capital
and reduce risks.

Improve
the scientific level of financial decision-making to prevent financial risks
arising from decision-making errors. Financial decision is the most critical
and important decision in enterprise decision. In the process of decision
making, various factors affecting decision making should be fully considered, and
the method of calculation and analysis combining qualitative and quantitative
methods should be adopted, and the scientific decision model should be used for
decision making. According to the model analysis, the financial decision plan
with less risk and greater benefit is selected to avoid the risk.

In
short, financial risks are omnipresent and inevitable. To maintain their own
survival and further development, enterprises must carefully analyze the
reasons for the formation of financial risks, and pay attention to, prevent and
resolve the financial risks of enterprises. Only in this way can the enterprise
stay invincible.